sunny.png
Wednesday September 28th, 2022 11:20AM

Wall Street ends lower as global central banks raise rates

By The Associated Press

Stocks fell again Thursday, deepening Wall Street's losses for the week, as central banks around the world hiked interest rates to fight inflation.

The S&P 500 fell 0.8%, its third straight drop. The benchmark index is down about 3% so far this week.

The Dow Jones Industrial Average fell 0.4% and the Nasdaq composite lost 1.4%. The Russell 2000 index of smaller company stocks fell 2.3%, a sign investors are worried about the economy. The major indexes are on pace for their fifth weekly loss in six weeks.

Bond yields mostly rose. The yield on the 2-year Treasury, which tends to follow expectations for Federal Reserve action, rose significantly to 4.11% from 4.02% late Wednesday. It is trading at its highest level since 2007. The yield on the 10-year Treasury, which influences mortgage rates, jumped to 3.70% from 3.51% from late Wednesday.

The latest wave of selling reflects concerns among investors that the Fed might have to get more aggressive than it has been signaling to ultimately get inflation under control, said Barry Bannister, chief equity strategist at Stifel. That scenario is unlikely if prices stabilize and fall, but it could take more than a year for that process to play out, he said.

“The question is, what’s the patience level for both the Fed and the market,” he said.

Central banks in Europe and Asia raised interest rates a day after the Federal Reserve made another big rate hike and indicated that more were on the way.

Britain’s central bank raised its key interest rate by another half-percentage point. Switzerland’s central bank raised its benchmark lending rate by its biggest margin to date, 0.75 percentage points, and said it couldn’t rule out more hikes. Central banks in Norway and the Philippines also raised interest rates.

The Fed and other central banks are raising interest rates in to make borrowing more expensive. The goal is to slow economic growth enough to tame inflation, but not so much that economies slip into a recession. Wall Street is worried that the Fed may be pumping the brakes too hard on an already slowing economy, which makes steering into a recession more likely.

On Wednesday, Fed chair Jerome Powell stressed his resolve to lift rates high enough to drive inflation back toward the central bank’s 2% goal. Powell said the Fed has just started to get to that level with this most recent increase. The U.S. central bank lifted its benchmark rate, which affects many consumer and business loans, to a range of 3% to 3.25%. That is the fifth rate hike this year and up from zero at the start of the year.

The Fed also released a forecast known as a “dot plot” that showed it expects its benchmark rate to be 4.4% by year’s end, a full point higher than envisioned in June.

“There’s not a lot of easy answers when you have the most powerful entity in the world, the Federal Reserve, committed to this path of hiking rates,” said Michael Antonelli, market strategist at Baird. “It just has people scrambling.”

The S&P 500 fell 31.94 points to 3,757.99 Thursday. The index is now at its lowest level since mid-June and down more than 21% so far this year.

The Dow lost 107.10 points to close at 30,076.68, while the Nasdaq finished down 153.39 points at 11,066.81. The Russell slid 39.85 points to 1,722.31.

The losses were broad and concentrated among retailers and technology, financial and industrial stocks. Starbucks fell 4.4%, Nvidia dropped 5.3%, American Express slid 3.8% and UPS fell 3.4%.

Health care stocks were among the few bright spots. Johnson & Johnson rose 1.8%.

Companies are closing in on the end of the third quarter and preparing for the next big round of earnings reports, though some early reports have trickled out. Homebuilder Lennar rose 2% after reporting strong financial results for its fiscal third-quarter. Fellow homebuilder KB Home fell 5.1% after a warning about supply chain problems and a mixed financial report.

—-

AP Business Writers Joe McDonald and Matt Ott contributed to this report.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Corporate News, AP Business - Economy, AP Business - Financial Markets, AP Business - Industries, AP Business - Financial Services
© Copyright 2022 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Biden vows US won't walk away from storm-struck Puerto Rico
President Joe Biden says the full force of the federal government is ready to help Puerto Rico recover from the devastation of Hurricane Fiona
4:34PM ( 6 minutes ago )
Czech government: NHL Russian players unwanted in Prague
The Czech Foreign Ministry has told the NHL that Russian players are not welcome for season-opening games because of the invasion of Ukraine
4:33PM ( 6 minutes ago )
Wall Street ends lower as global central banks raise rates
Stocks closed lower on Wall Street, deepening their losses for the week, as central banks around the world raised interest rates to fight inflation
4:09PM ( 30 minutes ago )
Associated Press (AP)
Mississippi agency ex-leader pleads guilty in welfare fraud
A former director of Mississippi’s welfare agency pleaded guilty Thursday to federal and state charges in a conspiracy to misspend tens of millions of dollars that were intended to help needy families
3:43PM ( 56 minutes ago )
US sanctions Iranian morality police after woman's death
The U.S. government has imposed sanctions on Iran’s morality police after the death in custody of a woman who'd been accused of wearing her Islamic headgear too loosely
3:17PM ( 1 hour ago )
Fugitive in massive Navy bribery case caught in Venezuela
A Malaysian defense contractor nicknamed “Fat Leonard” who orchestrated one of the largest bribery scandals in U.S. military history has been arrested in Venezuela
3:13PM ( 1 hour ago )
AP Business
France wants to boost renewable energy, now lagging behind
President Emmanuel Macron is set to unveil a plan to boost renewable energy in France including offshore wind farms and solar power
5:59AM ( 10 hours ago )
Thieves key on hack that leaves Hyundai, Kia cars vulnerable
Some Hyundai and Kia cars and SUVs are missing a “key” anti-theft device, and thieves know
1:21AM ( 15 hours ago )
'Art of the steal': Trump accused of vast fraud in NY suit
New York’s attorney general has sued former President Donald Trump and his company, alleging business fraud involving some of their most prized assets, including properties in Manhattan, Chicago and Washington, D
10:40PM ( 17 hours ago )
AP Business - Corporate News
Big bank CEOs face 2nd day of questioning from lawmakers
The CEOs of the nation’s biggest banks were in for a second day of tough questioning from lawmakers Thursday, as Americans face inflation not seen since the early 1980s and a midterm election is only weeks away
12:12PM ( 4 hours ago )
Biden holds his first meeting with Philippine leader Marcos
President Joe Biden is meeting with Philippine President Ferdinand Marcos Jr. on the sidelines of the U.N. General Assembly
12:08PM ( 4 hours ago )
Zelenskyy aide: Ukraine needs funds, expand Russia sanctions
A top Ukrainian government economist says the country's efforts to defend itself from Russia are placing a severe financial burden on the country that it can only bear with the help of outside support
11:49AM ( 4 hours ago )
AP Business - Economy
Turkish central bank lowers interest rate to 12%
Turkey’s central bank has delivered another interest rate cut and lowered the benchmark rate by 1 percentage point to 12%
7:21AM ( 9 hours ago )
Bank of England rate hike avoids more aggressive step
Britain’s central bank has raised its key interest rate by another half-percentage point, avoiding more aggressive steps to tame inflation that the U.S. Federal Reserve and other banks have taken
7:10AM ( 9 hours ago )
Turkish lira hits record low before central bank meeting
Turkey’s currency has fallen to a record low against the dollar before a central bank meeting on interest rates
6:57AM ( 9 hours ago )
AP Business - Financial Markets
Judge blocks Indiana abortion ban week after it took effect
An Indiana judge has blocked the state’s abortion ban from being enforced, putting the new law on hold as abortion clinic operators argue that it violates the state constitution
11:31AM ( 5 hours ago )
AP: Probe finds evidence of bank boss' romance with top aide
Investigators say they found evidence a former Trump official who heads Latin America’s biggest development bank carried on a romantic relationship with his chief of staff
11:26AM ( 5 hours ago )
More consumers buying organic, but US farmers still wary
It used to be that organic crops were an oddity, destined for health food stores or maybe a few farmers markets
10:28AM ( 6 hours ago )
AP Business - Industries
Bank CEOs warn that US economy faces 'daunting' challenges
The CEOs of the nation’s biggest banks have appeared in front of Congress and given a dim view of the U.S. economy, reflecting the financial and economic distress many Americans are facing
6:26PM ( 22 hours ago )
US has sent $8.28 billion in pandemic funds to local lenders
On the same day the Federal Reserve gave a sobering report on the U.S. economy’s trajectory, administration officials highlighted how they have kept some of the nation’s smallest businesses afloat through the pandemic
5:23PM ( 23 hours ago )
Bank CEOs warn of 'daunting' challenges from inflation
The CEOs of the nation’s biggest banks appeared in front of Congress Wednesday and gave a dim view of the U.S. economy, reflecting the financial and economic distress many Americans are facing
4:42PM ( 23 hours ago )
AP Business - Financial Services
Biden vows US won't walk away from storm-struck Puerto Rico
President Joe Biden says the full force of the federal government is ready to help Puerto Rico recover from the devastation of Hurricane Fiona
4:34PM ( 6 minutes ago )
Czech government: NHL Russian players unwanted in Prague
The Czech Foreign Ministry has told the NHL that Russian players are not welcome for season-opening games because of the invasion of Ukraine
4:33PM ( 6 minutes ago )
Execs: US casinos learned some useful lessons from pandemic
The COVID pandemic forced most U.S. casinos to close for months, causing payrolls, revenue and earnings to tumble
4:09PM ( 30 minutes ago )
Milestone balls leave fans with a choice: return it or sell?
Sal Durante was 19 when he caught Roger Maris’ record-breaking 61st home run in 1961
4:08PM ( 31 minutes ago )
Ex-Illinois cop charged in 2020 fatal shooting of Black man
A former suburban Chicago police officer who was fired after he shot into a car two years ago, killing a Black man and seriously wounding the man’s girlfriend, has been charged with second-degree murder and involuntary manslaughter
3:58PM ( 42 minutes ago )